What is recruitment process outsourcing (RPO)?

What is recruitment process outsourcing (RPO)?Ivana Georgievska
June 8, 2022

Benefits of outsourcing recruitment 

According to HR reports conducted over the past 5 years, the cost of employee turnover can range from 30-400% of an employee’s annual salary. 

Reap the benefits of outsourcing recruitment services, by working with companies that do RPO, or recruitment process outsourcing.

In this article we show the exact numbers that impact your success and point out how to prevent such devastating loss of talent and money.     

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Key Takeaways

The 4 top benefits of recruitment process outsourcing are:

  • Reduced cost
  • Faster and more efficient recruitment
  • No need to have all recruitment expertise in-house
  • Increased flexibility in hiring
  • Access to new markets
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To have an idea about what it means to replace an employee, here are some stats:

  • Entry-level employees cost 30-60% of their annual salary to replace.
  • Middle-level employees cost 150% of their annual salary to replace.
  • Specialised or high-level employees cost 200-400% of their annual salary to replace.

What costs are we talking about?

Let’s be clear. When an employee leaves the company, the management faces numerous types of expenses and problems.

More importantly, the result is always a short- and medium-term financial loss.

When the costs carry over for a longer period, the business needs to bring some structural changes. 

These are the “first-impact” costs from an employee turnover:

  • Administration costs for leavers: exit interviews, payroll changes, etc.
  • Covering a vacancy with temporary workers or overtime.
  • Recruitment costs: advertising the vacancy, reviewing applications, conducting interviews, etc.
  • On-boarding new hires: induction, training, mentorship, etc.
  • Severance pay.

There are the consequential costs that every organisation faces:

  • Lost expertise.
  • Missed deadlines and workflow disruptions.
  • Increased absenteeism due to stress.
  • Decreased productivity or customer service.
  • Reduced morale, which may cause remaining employees to express a desire to leave the organisation.
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How to prevent employee turnover (costs)?

Face the facts. The cost of employee turnover often goes unrecognised. 

Unfortunately, many companies do not recognize the cost of turnover as a significant problem. 

Studies found that less than half of organizations have a process to correctly calculate turnover costs. 

Another issue is that the cost of turnover is often underestimated and deemed to be an “unavoidable” cost of doing business.

It is true that some degree of turnover is inevitable and may even be advantageous.

The goal should be to retain top talent while replacing low performers. 

Managers who are conscious of the rate and cost of turnover in their organizations are better positioned to control these costs.

How can you counter the damages? - By utilizing the benefits of outsourced recruitment. 

What matters to qualified talent?

A Harvard University study found that 80% of employee turnover stems from mistakes made during the hiring process. 

It’s all about prevention. Don’t wait until your organization has a turnover crisis. 

An intelligent and informed hiring strategy is one of the best ways to prevent excessive turnover costs.

According to a PwC Future of Recruiting Survey, job applicants shared the following feedback: 

  • 49% turned down an offer due to a bad recruiting experience
  • 72% need to understand the work culture before accepting a job offer
  • 56% would discourage others from applying because of bad recruiting
  • 71% consider employer reputation more important than brand

Ensure competent and efficient recruitment

According to Zappia’s average cost per hire research, on average, it takes 36 to 42 days to fill an average position in the United States. It also costs about $4,425 per hire.

What’s the obvious solution? - Integrate the benefits of outsourcing recruitment into your agile HR strategy. 

How can a professional recruitment company help your business grow for less money?

Faster hiring process and better candidates

The secret is having a pool of qualified candidates for any position.

Knowing how time-consuming it is to find, assess, and hire the right talent, select a recruiting company that already has a vast candidate network.

Even with such an advantage, the process may take 7-21 days to complete, depending on the role and the employer’s criteria.

Another benefit is the access to highly skilled (in most cases, already screened) candidates from anywhere in the world.

Whether you want to hire an office employee or a remote talent, a professional team of recruiters has already done that. Multiple times, for different clients. 

Reduce costs and turnovers

According to research, internal human resources teams can increase a firm’s hiring costs by 50% or more. 

An internal HR recruiter earning an annual salary of $51,000 increases hiring costs by at least $4,250 monthly.

High turnover rates are very costly for companies, and those numbers can be elusive. Studies show cost ranges from $15,000 to $50,000, if not more. 

Companies incur sudden costs during talent acquisition and onboarding, which can include weeks of orientation, training, and ramp-up time to learn the critical aspects of the role. 

When companies make a poor hire, they lose money on time and resources, not to mention a replacement. 

Recruiting firms provide a helpful, thorough hiring process, which includes technical, intangible and cultural vetting, comprehensive background checks, and not to mention, helping clients reduce time to fill.

Become a company with a flexible hiring strategy

Combining a strategy of full-time and contract recruiters enables companies to meet the workload demands and the ever-changing work environments. 

Recruiting firms support the need for flexible hiring strategies by providing various hiring options catered to your preferences.

The first solution, temporary staffing, is an excellent option for companies looking for quick help for short-term or long-term projects or seasonal work. 

Recruiting companies provide skilled professionals who can start immediately, commonly within 24 hours.

They also handle payroll, with services like an EOR, benefits, and other HR needs on behalf of the temporary employee, which is a cost-saving solution for all employers.

Another great flexible solution offered by recruiting companies is a “try-before-you-buy” concept that allows the client and candidate to get to know each other and determine chemistry and the culture fit for a long-time commitment.  

And the most significant benefit comes with permanent hiring. Your hiring partners will provide employers with the opportunity to rely on recruiting experts to conduct:

  • Sourcing
  • Candidate identification
  • Vetting and screening 
  • Interview process and management
  • References
  • Offer negotiations

Market expertise and experience in specific industries

Most recruiting firms specialize or focus on their industry niche(s), so they already will have a pool of highly skilled candidates for you. 

Employees and internal recruiters are routinely asked to fill positions across various departments, which is time-consuming and overwhelming. 

Recruiting firms bring expertise for hard-to-fill positions, something internal recruiters may not be able to dedicate to because of time or technical ability. 

Increase employee retention and brand reputation

Around 69% of employees are more likely to stay with a company for three years if they have had a good onboarding experience. 

Recruiters spend most of their time talking to people, making them excellent communicators.

That’s why when it comes to onboarding employees, their attention to detail and continuous follow-up efforts make for a cheerful welcome and improve the chances of new hires sticking around

The power of first impressions cannot be overstated. What the future employee thinks of their hiring experience transpires into the attitude toward the new employer and the work they perform.

And we’re only scratching the surface regarding the benefits of outsourcing recruitment services.

Building positive experience and trust from the get-go is the best way to start any journey, especially a professional one.  

We help you find the best talent for you 

Are you looking for help with your recruitment? Outsource it to us and our RPO service.

Our team at Talentroo will assist you immediately.  

Get in touch with us at to set up a call. 

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